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Cyprus adopts a new “Startup Visa” for third country nationals

On the 15th of February 2017, Cyprus adopted the “Startup Visa” (Startup Permit Scheme) for third country nationals interested in residing and investing in innovative businesses in Cyprus. This National Plan will initially be applied for two years, during which 150 residence permits are available to be issued.

The scheme is part of the Policy Statement on Strengthening the Entrepreneurial Ecosystem. The plan allows talented entrepreneurs from third countries (Non-EEA), who are either individuals or group of investors, to reside in Cyprus and to establish and/or operate and/or develop their own innovative startup companies with high growth potential, provided that they meet certain criteria.

The main criteria of the scheme include:

access to EUR 50,000 worth of capital (may include venture capital funding, crowdfunding or other sources of funding);

an innovative business/business plan;

principal offices and tax residency registered in Cyprus;

exercise of the management and control of the companies from Cyprus;

the founder must hold an undergraduate degree or an equivalent professional qualification, and

very good knowledge of Greek and/or English.

The business will be considered innovative, if at least 10% of the operational expenses, within a certain year of a three year period, are related to research and development.

A startup team may consist of up to five (5) founders or at least one (1) founder and additional executive/managers (C-level employees) who are entitled to stock options. In any case, the team must not exceed five members. The founders who are third country nationals must own, in total, more than 50% of the shares of the company. The founder must have access to EUR 25,000 capital. In case the founders are more than two then the capital must amount to at least EUR 50,000 in total.

Benefits of the program include:

Right to residence and work permit issued by the Republic of Cyprus for one year with the possibility of renewal for at least another one year;

For the founder(s): ability to be self-employed or be employed by their own company in the Republic of Cyprus;

For the senior executive(s): ability to be employed by the company of the founders registered in the Republic of Cyprus;

Prospective to reside in the Republic of Cyprus without a maximum time limit in case of the company’s success;

Right to family reunification, in case of company’s success;

Ability to hire a specific number of foreign staff (from non-EU countries) without the prior approval of the Department of Labor, in case of success of the enterprise.

The success of the company will be evaluated after two years of operation by the Ministry of Finance or the relevant Authority appointed by the Ministry. During the evaluation a number of factors will be taken into consideration such as number of employees, taxes paid in Cyprus, exports, income and any additional investments made in the company. The Cyprus Startup Visa program is an excellent opportunity for talented entrepreneurs and their executives from third countries to invest, work and live in Cyprus. Cyprus is considered to be the 5th safest country in the world, one of the best place to do business within the EU and a commercial crossroad between Europe Africa and Asia. Apart from the tax advantages it offers many more advantages for entrepreneurs and for their businesses.

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